California Trusts are Tricky
Everyone has read the ads about living trusts. The major purposes for a living trust are to avoid probate and to save on death taxes. There are many other reasons such as asset protection, clarification of inheritance rights, administration of estate, guardianship and other issues. However, to utilize the trust can be tricky. For instance, the Court of Appeal, Fourth Appellate District, Division Three, rendered a decision filed on Ooctober 28, 2009, and ordered for publication on November 24, 2009, in the case of Presta v. Tepper. In that case, three partnership agreements were created with regard to real estate investments. The partnership agreements reads: Robert Tepper as Trustee for [his family trust] and Ronald Presta as Trustee for [his family trust]. The issue decided by the Court was whether or not the individual men entered into the partnership agreements or did the family trusts enter into the agreements. The Court decided that the individual men entered into the partnership agreements and not the family trusts. Therefore, the family trusts did not have any effect with regard to distribution of the partnership proceeds. If the partnership agreements had been created by Ronald Presta Family Trust and Robert Tepper Family Trust, then the Trust Agreements would hold the interests in the partnership. Why was this important? One partner had died and the widow was suing for distribution of the partnership assets. Therefore, wording can be critical in preparing these legal instruments. The Law Offices of FrazeeLaron stands ready to assist in legal instrument preparation including irrevocable trust agreements or other estate planning documents.

